State-level insurance measure heading to Tomblin for signature

March 9, 2014

WHEELING - The House of Delegates overwhelmingly passed legislation Friday to encourage development of a private flood insurance market in the state, despite questions about whether the measure will make much difference for thousands of West Virginians facing massive premium increases to their federally subsidized policies.

The bill passed 86-8, with all area delegates voting in favor. The bill, introduced by Sen. Rocky Fitzsimmons, D-Wheeling, now awaits Gov. Earl Ray Tomblin's signature before becoming law.

During Friday's floor debate, some lawmakers cast doubts about whether the bill truly does anything to encourage competition with the National Flood Insurance Program, which is awash in red ink following disasters such as Hurricane Katrina and Superstorm Sandy. They pointed out there's nothing in state code that forbids private carriers from offering flood insurance.

"I'm not telling you to vote against this. You're going to go back to your constituents and say, 'I voted for this bill," said Delegate Bob Ashley, R-Roane. "A yes vote does very little. A no vote does very little. This is a feel-good bill."

Delegate Steve Westfall, R-Jackson, delivered more pointed comments about the bill's impact, but he, too, ultimately voted in favor of the measure.

"Why is the Senate wasting our time with something that is already possible? ... Have any companies asked to do this so far?" he asked.

Delegate Tim Manchin, D-Marion, said he was not aware of any insurers making such a request.

According to Fitzsimmons, the bill would make it easier for insurance agents to shop for policies offered by insurers licensed outside West Virginia. It also specifies that insurers may offer policies that allow property owners to take on more risk by purchasing policies that insure for less than a home's full replacement cost.

Following the Senate's unanimous passage of the bill last month, Fitzsimmons acknowledged it doesn't guarantee that a private flood insurance market will develop, but said "it doesn't cost the state of West Virginia a penny to go down this route."

The Northern Panhandle, with a number of communities along the Ohio River, already has been hit hard by the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012, which phases out lower, subsidized rates offered through the FEMA-run NFIP in favor of more actuarially sound rates. In some cases, premiums have soared by as much as 10 times the previous rate.

Both the U.S. Senate and House of Representatives have passed their own bills reforming Biggert-Waters in hopes of blunting the law's impact on property owners.

The Senate version provides for an outright four-year delay in premium increases, while the House bill would provide more modest relief, lowering maximum annual premium increases for those who continue to live in their homes and preventing devastating immediate jumps to full-risk rates for new policies that are making it difficult to buy or sell a home in a flood zone.

The Senate may take up the House version in the coming weeks, but it's unclear whether lawmakers there will accept the House changes or continue pushing for an outright delay.